One space that has actually benefitted from the pandemic is eSports. The revolution that it represents has only further solidified itself in the niche of competitive activities during recent months because events can be managed without live crowds if need be. That has likely only stoked the fire burning under would-be fans and competitors.
In addition, the eSports target market consists almost entirely of people who are just beginning to enter their prime spending years and those younger who will be making the same transition just around the next corner.
This is a boom that will continue to evolve and grow and develop over coming months, quarters, and years, with commercial rewards blooming for companies positioned in the space as a result.
With that in mind, we take a look at a handful of stocks that are active and growing forces in the space, including: Esports Entertainment Group Inc (NASDAQ:GMBL), HUYA Inc – ADR (NYSE:HUYA), Sports Venues of Florida Inc (OTCMKTS:BTHR), and Activision Blizzard Inc (NASDAQ:ATVI).
Esports Entertainment Group Inc (NASDAQ:GMBL) trumpets itself as an online gambling company in Canada. The company offers bet exchange style wagering, player versus player betting, and on professional esports events.
It also operates vie.gg, an online esports wagering Website. The company was formerly known as VGambling, Inc. and changed its name to Esports Entertainment Group, Inc. in May 2017.
Esports Entertainment Group Inc (NASDAQ:GMBL) just signed a Letter of Intent to acquire the Esports Gaming League (“EGL”), a fast-growing UK-based esports company, founded in 2010, serving a rapidly expanding community of gamers in Europe, Middle East, and the Americas.
According to the release, EGL is a B2B-centric provider of live and online events and tournaments where gamers can compete and enjoy a wide range of content relating to esports and video games on a proprietary technology platform with over 350K registered gamers. Services include full turnkey esports events, live broadcast production, game launches, and online branded tournaments.
Even in light of this news, GMBL has had a rough past week of trading action, with shares sinking something like -5% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -9%.
Esports Entertainment Group Inc (NASDAQ:GMBL) had no reported sales in its last quarterly financial data. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($9K against $14.1M, respectively).
HUYA Inc – ADR (NYSE:HUYA) bills itself as company that, through its subsidiaries, operates game live streaming platforms in the People’s Republic of China. Its platforms enable broadcasters and viewers to interact during live streaming. The company also provides advertising and online game-related services, including a presence in the eSports marketplace.
The company has cooperated with e-sports event organizers, as well as major game developers and publishers, to foster an online space for gaming and e-sports players and their audiences. Live streaming of e-sports, now a mainstream entertainment option in China, has developed into one of the most popular content genres on its platform. HUYA has the largest and most active game live streaming community in terms of average MAUs and average daily time spent on mobile app per mobile active user. Its live streaming content covers more than 2,600 different games, including mobile, PC, and console games.
HUYA Inc – ADR (NYSE:HUYA) just recently announced that its Board of Directors has formed a special committee consisting of two independent directors, Mr. Hongqiang Zhao and Mr. Tsang Wah Kwong, to consider the previously announced preliminary non-binding proposal set out in an August 10, 2020 letter from Tencent Holdings Limited. Mr. Zhao chairs the special committee. The special committee has retained Citigroup Global Markets Inc. as its independent financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its U.S. legal counsel.
According to the company’s release, the Board cautions the Company’s shareholders and others considering trading in its securities that no decisions have been made with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 12% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 19% in that time on strong overall action.
HUYA Inc – ADR (NYSE:HUYA) generated sales of $380.5M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 10.1% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.5B against $352.3M).
Sports Venues of Florida Inc (OTCMKTS:BTHR) is a commercial-stage company with multiple high-growth segments at various stages of evolution toward expanding operations in the eSports, digital sports, and sports complex markets.
The company, through its wholly owned subsidiary, Shadow Gaming, Inc., has aggressively entered the eSports market with strong initial success. This is one of the most interesting stories in the space precisely because it is more speculative, with far less already priced into shares in terms of tangible growth. The company also has an interesting and unique angle that was recently discussed.
Sports Venues of Florida Inc (OTCMKTS:BTHR) just put out a press release outlining what it suggests is a unique strategic focus: “We have predicated our strategy on the independent game scene, instead of the blockbuster AAA game market,” commented Luis A. Arce, President of Shadow Gaming. “To our knowledge, we are the only major eSports entity with that unique strategic focus. There are indie game studios all over the world that regularly generate titles that build followings in the millions of players. But because they don’t reach tens of millions, the monolithic eSports establishment doesn’t cater to those titles in terms of serious organized gaming events. With no support, enthusiastic players that love these games spend their own money to create their own events. We are working to effectively roll up that market. And we seem to have no competition in that effort.”
Shadow Gaming is focused on sponsoring multiple events across the top 20 non-AAA games in the world, gathering player data in the process. Management believes this will create a foundational database of millions of gaming enthusiasts regularly engaged in Shadow Gaming indie game events, creating unchallenged dominance as a pivotal resource in helping these smaller studios market new titles.
BTHR shares have pulled back after a parabolic run higher in April and May. The stock is now still sitting well above its levels from February and March with key support being tested. This pullback is finding some signs of near-term support just as the company appears to be ramping up both its communications and operations in terms of eSports tournaments within the framework of its unique strategic focus.
Sports Venues of Florida Inc (OTCMKTS:BTHR) is still pre-revenue, but the company’s most recent announcement suggests the transition to monetization is nearing as it sees a major jump in participation. On Discord alone, BTHR has seen monthly sequential growth of 5533%, 948%, and 488% over the past three months. Event participation has grown between 90-120% iteratively across multiple games in the Company’s initial event series. The company also restated its intention to dramatically increase the number and size of events over coming months.
Activision Blizzard Inc (NASDAQ:ATVI) promulgates itself a company that develops and distributes content and services on video game consoles, personal computers (PC), and mobile devices. The company operates through three segments: Activision Publishing, Inc.; Blizzard Entertainment, Inc.; and King Digital Entertainment. The company develops, publishes, and sells interactive software products and entertainment content for the console and PC platforms through retail and digital channels, including subscription, full-game, and in-game sales, as well as by licensing software to third-party or related-party companies; and offers downloadable content.
It also maintains a proprietary online gaming service, Battle.net that facilitates the creation of user generated content, digital distribution, and online social connectivity in its games; and develops and publishes interactive entertainment content and services primarily on mobile platforms, such as Android and iOS, as well as distributes its content and services on the PC platform primarily through Facebook.
Activision Blizzard Inc (NASDAQ:ATVI) just announced the appointment of Major League Baseball’s Tony Petitti as President of Sports and Entertainment effective August 17, 2020. In his new role, reporting to Activision Blizzard CEO Bobby Kotick, Petitti will oversee esports, consumer products, and film and television.
“Tony is one of the most highly regarded executives in sports and entertainment,” said Bobby Kotick, Chief Executive Officer of Activision Blizzard. “His success in media and as Deputy Commissioner and Chief Operating Officer of Major League Baseball is the perfect blend of skills to help us realize our aspirations for esports and our related businesses. He is admired by owners, media executives, players and fans.”
And the stock has been acting well over recent days, up something like 3% in that time. Shares of the stock have powered higher over the past month, rallying roughly 4% in that time on strong overall action. Activision Blizzard Inc (NASDAQ:ATVI) pulled in sales of $1.9B in its last reported quarterly financials, representing top line growth of 38.8%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($6.3B against $2.6B).